Salary and dividends
Many lenders assess limited company directors using salary plus dividends shown on personal tax returns.
This approach works well for directors who extract most of their income personally, but it can significantly restrict affordability for those who retain profit within the business.
- Based on SA302s and Tax Year Overviews
- Typically requires two or three years of figures
- Does not consider retained profits
Salary and net company profit
Some lenders take a broader view and assess affordability using salary plus your share of net company profit.
This method can dramatically increase borrowing capacity for directors who operate tax-efficient structures and leave profit within the company.
- Uses company accounts rather than just personal income
- Requires confirmation of shareholding percentage
- Often produces significantly higher affordability
Lower affordability example
A director takes £50,000 combined salary and dividends. One lender may assess affordability purely on this figure.
Higher affordability example
Another lender may use £50,000 salary plus retained profits, assessing income closer to £130,000 for the same applicant.
Trading history requirements
Most lenders require a minimum trading history, but this varies.
- Some require three full years of accounts
- Many accept two years
- In limited cases, one year may be considered with strong supporting evidence
Recent changes in income, company structure, or shareholding can affect which lenders are available.
Documentation you’ll usually need
- SA302s and Tax Year Overviews
- Full company accounts
- Business and personal bank statements
- Confirmation of shareholding and director status
Why lender choice is critical
Two lenders can view the same limited company director very differently. Applying to the wrong lender first can lead to unnecessary declines, wasted time, and avoidable credit searches.
This is why limited company directors benefit from speaking to a broker early — to identify which lenders will assess income in the most appropriate way before any application is submitted.
Using a broker to maximise affordability
A broker’s role is not just to find a rate, but to:
- Identify the correct income assessment method
- Package accounts correctly for underwriter review
- Avoid unsuitable lenders
- Set realistic expectations from the outset
With the right preparation, limited company directors can often borrow more — and access better rates — than they expect.